Role of electronic trading in emerging stock markets performance

Rashi Mohnot, Rajesh Mohnot and Pushkala Muralidharan

International Journal of Business Forecasting and Marketing Intelligence, 2017, vol. 3, issue 4, 388-406

Abstract: The adoption of electronic trading mechanism in the stock markets has seen several positive developments such as minimisation of costs, disclosure of information and transaction transparency. E-commerce has the potential to improve the operational efficiency of financial markets and intermediaries alike in the developed part of the world but it still remains inadequately tested in emerging and developing markets. The present study investigates the impact of electronic trading system on emerging countries' stock markets performance. Applying the most popular conditional variance model, it was found that four out of five countries' volatility patterns are not found to be time dependent. Only South African stock market returns were found to be time dependent where investors can make some judgment about the future stock price behaviour based on the past. This study supports an important market efficiency hypothesis that no one can predict future stock price behaviour and make undue profit. Four countries markets (other than South Africa) seem to be efficient markets.

Keywords: electronic trading; volatility patterns; emerging stock markets; forecasting. (search for similar items in EconPapers)
Date: 2017
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